News

The balance between climate change mitigation and energy supply – and why the world isn’t ending

The balance between climate change mitigation and energy supply – and why the world isn’t ending

Details

Published: 08 December 2015

By Ewan Neilson, Partner

Air travellers are used to captain’s warnings of the potential for turbulence – most are accustomed to considerable ups and downs, with crew and passengers remaining calm and arriving at their destination without the onset of panic.

There are however times when one or two can’t take the rocky ride in their stride and scream, unsettling everyone.

COP21, the Paris Climate Conference, is the result of considerable scientific research and debate, and a great deal of political posturing-some people are taking absolute positions, some people inducing panic and others even declaring the end is nigh.

COP21 represents a momentous change as the scientific community, energy companies and the world’s leading political leaders are in common agreement that the effects of CO2 emissions needed to be mitigated. World leaders’ involvement has pushed COP21 onto the world stage and debating the balance between a world economy in which world GDP is assumed to grow more than two and a half times its current size, and where energy use worldwide is set to grow by one third to 2040 driven primarily by India, China, Africa, The Middle East and South East Asia.

There are already critics, who say it is bound to fail as there will be no binding International Treaty to limit CO2 emissions and, without that, the world will face catastrophic and uncontrollable climate change. Others, including Andrew Hill (Article, FT – “Energy Groups face a Kodak moment on climate change”, 1st December 2015) are prophets of doom and describe the end of fossil fuels with a comparison to the end of the steam age and Kodak. Yet the event is a substantial success before its conclusion, as Governments have individually agreed to do something about climate change. They accept it is happening while balancing the needs of countries where there is an expectation of substantially increased standards of living. The need to take large numbers of people out of absolute poverty and provide energy security of supply to individual countries weighs heavy on their Governments. The objective of COP21 should be to make long term planning decisions to provide large parts of the world population with the opportunity and hope of better living conditions, against a backdrop of an estimated substantial increase in human population from 7.1 billion to 9 billion in 25 years while finding the right energy mix and resources to supply a world population with its needs in the future. COP21 is therefore about implementing “good behaviours” and not about absolute deadlines and absolute obligations to be bound by treaties. And it is not about listening to doomsday predictions which undermine people’s hope and belief in a better world. Two key reports have been published recently: the BP Statistical Review of World Energy (June 2015, the 64th edition, and one of the world’s most important titles on energy use and statistics); and the World Energy Outlook 2015, published by the Paris-based International Energy Agency, which takes Government and energy company statistics and forecasts the outlook on the year 2040 based on world population, regional energy demand and supply and the energy mix might look like. Both evidence the complexity for world Governments in developing policies internationally, regionally and nationally to meet energy demand with energy supply in the future. Will fossil fuels still be used in 2040? If they at the root of climate change what mitigation can be achieved? Many people on the front line of the energy industry understand those simple questions have very complex answers and, in some cases, there simply are none to offer. What can be predicted is that technology will bring substantial change, it is more than likely oil and especially gas will be needed in ever more quantities but with substantial CO2 mitigation in the future and that there will be a rebalancing of energy portfolios for different countries with security of supply being at the heart of it policy decisions. Given the pledges made on climate change, and the work being done to find solutions for the future, substantial moves in the right direction have been made which should leave the “panickers” and doomsday prophets on the sidelines.